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1 1 (March 2020)

handle is hein.congrec/cborptas0001 and id is 1 raw text is: :, i~l MARCH 2020 Report on the Troubled Asset Relief Program- March 2020 In October 2008, the Emergency Economic Stabilization Act of 2008 (Division A of Public Law 110-343) estab- lished the Troubled Asset Relief Program (TARP) to enable the Department of the Treasury to promote stability in financial markets through the purchase and guarantee of troubled assets.' Section 202 of that legislation, as amended, requires annual reports from the Office of Management and Budget (OMB) on the costs of the program.2 The law also requires the Congressional Budget Office to submit its own report within 45 days of the issuance of OMB's report each year. CBO's assess- ment must discuss three elements: 1 That law defines troubled assets as (A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress (Sec. 3 of P.L. 110-343, 122 Stat. 3767). 2. Originally, the law required OMB and the Congressional Budget Office to submit semiannual reports. That provision was changed to an annual reporting requirement by P.L. 112-204. OMB's most recent report on the TARP was submitted on February 10, 2020, as part of Budget of the United States Government, Fiscal Year 2021: Analytical Perspectives (February 2020), pp. 255-256, www.whitehouse.gov/omb/analytical-perspectives. The costs of purchases and guarantees of troubled assets, Information CBO collects and the valuation methods it uses to calculate those costs, and * The program's effects on the federal budget deficit and debt. To fulfill that requirement, CBO has prepared this report on TARP transactions completed, outstanding, or anticipated as of January 31, 2020. By CBO's esti- mate, $443.9 billion of the $700 billion initially autho- rized will be disbursed through the TARP, consisting of $442.5 billion already disbursed and $1.4 billion in projected future disbursements. CBO estimates that the government's total subsidy costs-including those already realized and those stemming from outstand- ing and anticipated transactions-will be $31 billion (see Table 1). The estimated cost of the TARP stems largely from ongo- ing grant programs aimed at preventing foreclosures on home mortgages, assistance to American International Group (AIG), and aid to the automotive industry. Taken together, other transactions with financial institutions have yielded a net gain to the federal government from interest, dividends, and capital gains. Notes: All years referred to are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers in the text and tables may not add up to totals because of rounding.

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